Constructing a stronger portfolio is going to require a little more work as well as expand our options beyond the “Rutherford 10.” Over the next several weeks look for the following changes to occur, particularly in reviews of larger portfolios where flexibility is available.
- Inclusion of a few (5 or 6) stocks that pass the value-momentum screens.
- Inclusion of three more ETFs that pass the tranche momentum screen. These three ETFs will come from screening over 125 ETFs.
- Building upon the “Rutherford 10” we will add three more ETFs to make up the “Baker’s Dozen.”
- Building on the “Baker’s Dozen” we will add as many as five or six individual stocks. If more than six stocks pass the value-momentum screen, the Piotroski F-Score will be lifted from seven (7) to eight (8). There are nine screens within the Piotroski F-Score and I generally have my screen set to seven. I don’t recall ever seeing a stock score a nine.
These changes are expected to improve performance in this sideways market as many of the new additions carry a low correlation with the “Rutherford 10” ETFs. In other words, these screens are identifying securities that are breaking out of the pack.